Moody's ups South African banks view to stable

The outlook for the South African banking system has been changed to stable from negative, largely reflecting the improving macroeconomic conditions that will likely have a positive impact on the sector's credit performance, Moody's Investors Service said in a new report.

After going through its first recession in 17 years, the South African economy is recovering and expected to grow by around 3% in 2010, the agency said.

Reduced interest rates and benign inflation are expected to help reduce debt-servicing costs and boost consumer affordability, Moody's said.

Those improved operating conditions are already having a positive impact on the banking sector's performance, the agency added.

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